1. Field of the Invention
The present invention is directed to a data processing system for conducting a modified on-line auction.
2. Description of the Related Art
The Internet""s impact on the way we live has been rapid and powerful. We can now communicate instantly, globally and around the clock. Communication can be performed textually, graphically, with audio and with video. The impact on how consumers purchase items is one of the most obvious changes brought by the Internet and, perhaps, the one experienced by the greatest number of people. The Internet has increased the efficiency of purchasing, chiefly by increasing the amount of the information brought to a purchase decision. The Internet has also increased the convenience of buying items, by extending the hours when consumers can shop, bringing hard to find items to anyone with an Internet connection and make it viable to deliver all sorts of goods and services by concentrating enough demand to fund a delivery infrastructure.
Although it has increased efficiency and convenience, the Internet has not yet profoundly changed the nature of how consumers purchase. Despite the newfound speed, convenience, knowledge and reach, buyers still meet in some manner to exchange money for goods. But the power of the Internet makes it possible to envision revolutionary new ways to restructure the age old relationships of seller and buyer, changing qualitatively the way value is established, created and exchanged.
Examples of attempts to change the way consumers make purchases using the Internet may be seen at the following web sites: www.ebay.com (xe2x80x9cEbayxe2x80x9d); www.mercata.com (xe2x80x9cMercataxe2x80x9d) and www.priceline.com (xe2x80x9cPricelinexe2x80x9d). Ebay is a straight auction system. Like other auctions, bidders compete against each other for items. No payment for bidding is required. No price is guaranteed to the seller, except for a reserved auction situation in which the seller does not have to complete the transaction until the seller""s reserve price is met. Sometimes, an auction can become heated and the price could exceed the market value of the item. Additionally, on-line auctions tend to be conducted over a number of days, thereby, reducing the entertainment value.
Mercata aggregates consumer demand in order to lower the price of a product. Mercata brings a group of interested buyers to a seller and, based on the number of buyers, negotiates a discount. Priceline can be thought of a reverse auction. Consumers individually make offers to buy airline tickets, hotel rooms, cars, and other items. Priceline shops these offers in real time to various sellers to try to make a match. The consumer must be flexible with brand preference, and must offer a reasonable price. Priceline claims to be able to match most of the offers, providing buyers with savings. When a consumer makes an offer to purchase, the consumer must guarantee that offer so that if Priceline finds a seller the purchase will be automatically transacted.
In all of the examples above, the consumer""s interest in the good or service and the sale price is directly tied to the value of that good or service. The Internet is used to find a meeting of the minds for a reasonable price. The power of the Internet is not used to obtain a lower price for the buyer and a higher price for the seller. Additionally, none of the above services add entertainment value to the purchase.
The present invention, roughly described, provides for a data processing system that can be used to conduct a modified auction. A minimum value is determined for an item to be auctioned. Potential bidders are provided the opportunity to buy rights to bid on the item. When the total proceeds from selling the rights to bid on the item become equal to or greater than the minimum value for the item, an auction is performed for the item. In one embodiment, only those entities that purchase the rights to bid may participate in the auction, and the auction is designed to prevent the auction price from becoming too high. If the minimum value of the item is set to the market value of the item, then the seller has received fair value before the auction begins. The additional proceeds from the auction provide the seller with proceeds above the market value. Meanwhile, the buyer paid a price below the market value. Thus, the present invention allows the interests of many consumers to be aggregated in order to reduce the sale price of an item.
One embodiment of the present invention includes storing a minimum price for selling an item in the computer system and receiving a request at the computer system to purchase rights to bid for the item. The request to purchase rights to bid is fulfilled using the computer system. The computer system determines the sum of purchases of the rights to bid. An auction is conducted for the item if the sum determined to be at least equal to the minimum price.
In various alternatives, different means are used to limit the auction so that the final sale price of the auction is lower than the market price of the item. For example, the bid increment can be restricted to a low number. Alternatively, the auction can be conducted for a very short period of time which maximizes the excitement and prevents the price from rising too high.
In one embodiment, the present invention is performed as an on-line service accessible via the Internet, or other network. The process described above is performed on one or more servers which are connected to the Internet and have access to various databases. In one implementation, the databases store web page data, item data, auction data, bid purchase data and user data. Client computers with access to the Internet (or other network) can access the server and participate in the modified on-line auction.
The present invention can be accomplished using hardware, software, or a combination of both hardware and software. The software used for the present invention is stored on one or more processor readable storage media including hard disk drives, CD-ROMs, optical disks, floppy disks, RAM, ROM or other suitable storage devices. In alternative embodiments, some or all of the software can be replaced by dedicated hardware including custom integrated circuits, gate arrays, FPGAs, PLDs, and special purpose computers.
These and other objects and advantages of the present invention will appear more clearly from the following description in which the preferred embodiment of the invention has been set forth in conjunction with the drawings.